Retirement planning decisions are growing increasingly complex in America, and older workers are facing critical financial choices in the latter years of their professional lives. Making optimal choices, however, requires an increasing level of financial literacy and knowledge.
In the United States, the majority of retirement savings are invested in equity — shares in publicly traded companies. Traditionally, high average returns have offset the inherent risks of investments in stocks, but that equation changed following the recent financial crisis. In the past three years, the value of equity has declined, growth has been sluggish and many forecasters have continued to predict low returns from stocks in the coming decade.
In the United States, 85.6% of those 65 or older receive most of their income from Social Security. Certain groups of individuals, however, are significantly less likely to collect benefits. This poses a significant challenge for policymakers and others concerned with the well-being of the country’s aging population.
In September 2011 the Census Bureau issued a report on household income, health insurance coverage and poverty levels in the United States. It showed the extent to which the Great Recession, despite having officially ended in 2009, continued to adversely impact Americans’ standards of living.
Studies have consistently shown that younger adults perform better than older, more experienced adults on decision-making tasks, lending credence to the belief that senior citizens suffer from age-related cognitive declines. These studies, however, have typically measured one type of decision-making focused on individual choices, and have not addressed how interconnected decisions — in which one decision predicates future options — are made.
